Friday, April 1, 2011

Corn closed at $7.36, up .4275 after trading limit up for a while.
Here's Agrimoney, March 11:

Goldman warns of 'downside risk' to crop prices

Agricultural commodity prices face "downside risk" – for now - Goldman Sachs analysts warned, while Rabobank said record corn values could still be on the agenda, as analysts reacted to an end to ever-tighter forecasts for crop supplies....

..."We believe that this stabilisation will put a lid on crop prices in the near-term," Goldman analyst Damien Courvalin said....MORE

And again on the 21st

Goldman cuts corn price hopes but warns on weather

Goldman Sachs cut its forecast for corn futures, saying the grain "will win the battle" for US plantings – but warned that even modest weather setbacks could send prices near to $9 a bushel.

The investment bank reduced by nearly $1 a bushel to $6.20 a bushel its forecast for Chicago corn futures in three months' time, with the estimate for prices in a year receiving a similar downgrade, to $5.80 a bushel.

Goldman also downgraded its estimate for Chicago soybean prices by $1.00 to $15.00 a bushel on a three-month perspective, citing the better prospects for South American crops, while keeping longer-term forecasts at $15.75 a bushel....MORE

Unprecedented strength in corn continues, with futures rising by 4.5% on Thursday, following strong demand for corn to make food and fuel. That demand has whittled down the corn supply, which was already at its lowest level in 15 years in the United States, the world's top exporter of the grain. Per Reuters: " Demand has been strong from the livestock and ethanol sectors, and from importing nations, including China which is believed to have purchased 1.25 million tonnes last week.

This week's rally, triggered by the U.S. Agriculture Department's lower-than-anticipated quarterly U.S. corn stocks estimate on Thursday, rekindled worries about food price inflation. The near-term supply concerns have largely overshadowed USDA's forecast that U.S. farmers will plant the second-largest corn acreage since 1944."

Yet whether due to fundamental reasons or pure momentum, Goldman has just added more fuel to the fire by raising its corn price forecast, after having lowered it a whopping 10 days ago, from $6.00/bu and $5.80/bu to $7.80/bu and $7.00/bu, for 6 and 12 months respectively. Of course, all those who followed Goldman's recent downgrade made some very inverse profits....MORE